Reagan Corporation (a C corporation) was formed in 2022 and is a fiscal-year taxpayer with a June 30 year-end. Reagan wants to make an S election for its tax year beginning in 2025. The election must be made by

George owns a 10% interest in the Bush Partnership from January 1 through March 31 (the 91st day of the tax year) of 2025. On April 1, 2025 George buys an additional 10% interest in the partnership. On July 1, 2025 (the 182nd day of the year) George buys an additional 20% interest in the partnership. Bush Partnership’s ordinary income is $156,800 and it is earned evenly throughout the year. George’s distributive share of the ordinary income is

Under a plan of complete liquidation, Adams Corporation distributes land (FMV $400,000; A/B $300,000) to John, a 25% shareholder.  John has a $200,000 basis in his Adams Corporation stock.  The land is inventory in the hands of Adams Corporation.  Adams Corporation must recognize

On December 31, 2025, after receipt of his share of partnership income, Ulysses sold his interest in Grant Partnership for $30,000 cash and relief of all liabilities. On that date, the adjusted basis of Ulysses’ partnership interest was $40,000, consisting of his capital account of $15,000 and his share of the partnership liabilities of $25,000. What is Ulysses’ gain or loss on the sale of his partnership interest?

Martin purchases a 50% interest in Van Buren Partnership for $30,000 cash on the first day of the partnership’s tax year, . The partnership has $40,000 in liabilities when Martin enters the partnership. Partners share the risk of loss from liabilities in the same way they share partnership income and losses. During 2025, the partnership incurs a $120,000 loss and a $20,000 increase in liabilities. How much of the loss can Martin report on his tax return for 2025?

Barack and Michelle are both 25% owner/managers for Obama Enterprises.  Barack runs the retail store in Little Rock, AR.  Michelle runs the retail store in Fayetteville, AR.  Obama Enterprises generated a $135,000 profit companywide made up of a $75,000 profit from the Little Rock store, a ($25,000) loss from the Fayetteville store, and a combined $85,000 profit from the remaining stores.  If Obama Enterprises is taxed as a partnership and decides that Barack and Michelle will be allocated 70% of their own store’s profit with the remaining profits allocated pro rata among all the owners, how much income will be allocated to Barack?

Millard transfers an asset having a FMV of $200,000 and an adjusted basis of $150,000 to Fillmore Corporation in a §351 transaction. Millard receives in exchange Fillmore common stock having an FMV of $175,000 and White House Corporation common stock (a capital asset) having a FMV of $25,000 and a basis of $10,000 to Fillmore Corporation. Fillmore Corporation must recognize

Rutherford sells his 20% interest in Hayes Corporation (an S corporation) to Lucy on January 30, 2025. Using the daily allocation method, how much income does Rutherford report if Hayes Corporation earned $200,000 from January 1, 2025 to January 29, 2025 (29 days) and $1,460,000 from January 30, 2025 through December 31, 2025?

The Johnson Partnership balance sheet (cash method) includes the following assets on December 31, 2025. Which of Johnson’s assets are considered hot assets?      Basis FMV   Cash $ 180,000 $ 180,000   Accounts receivable            -0-      60,000   Equipment (cost = $100,000)      40,000      50,000   Land      90,000    120,000       Total $ 310,000 $ 410,000   

On the first day of the partnership’s tax year, James purchases a 40% interest in Madison Partnership for $30,000 cash. The partnership has $40,000 in liabilities when James enters the partnership. Partners share the risk of loss from liabilities in the same way they share partnership income and losses. During 2025, the partnership incurs a $150,000 loss and a $20,000 increase in liabilities. How much of the loss can James report on his tax return for 2025?